With its strategic location and business friendly regulatory environment, Malaysia has been a top destination for foreign entrepreneurs and international businesses such as Fortune 500 Companies looking to expand their footprint in South East Asia. The case in point is 100% foreign ownership allowed in many industries, with such a business-friendly policy, and strategic access to South East Asia/ASEAN markets, Malaysia is an attractive regional hub for global investments.
The process of setting up a company in Malaysia is relatively straightforward but it may be confusing and complicated for foreigners as it requires understanding of company structures, legal requirements, and compliance regulations. Amaze Advisory has prepared this step-by-step guide on incorporation process to help you to have an understanding and therefore make you at ease throughout the journey.
At Amaze Advisory, we specialise in Company Incorporation, Company Secretarial, Accounting and Financial Advisory, Tax & Advisory, Payroll Outsourcing, Employer of Record (EOR) and Immigration & Global Mobility for foreign investors. Our goal is for us to take care of the legal complexities so you can focus on growing your business in a new market.
Why Incorporate a Business in Malaysia?
- 100% Foreign Ownership Allowed:
No local Malaysian partner required for most industries. - Easy Incorporation Process:
Company setup can be completed in 2-5 working days - Attractive Tax Benefits and Business Friendly Tax Regime:
Corporate tax incentive for selective industries. - Strategic Location:
Gateway to ASEAN’s 650 million consumers, China’s and India’s 2.8 billion consumers. In addition, you can get to major cities within 6 hours. - Business-Friendly Government Policies:
Malaysia welcomes foreign investments and ease of obtaining employment pass for expatriates.
Step-by-Step Guide to Incorporating a Company in Malaysia
1. Choose the Right Company Structure
Foreigners looking to incorporate a business in Malaysia can choose from several legal structures:
- Private Limited Company (Sendirian Berhad/Sdn Bhd):
The most popular company structure for foreign investors, allowing 100% foreign ownership in most sectors and established regulations. - Limited Liability Partnership:
Combines the benefits of a partnership and a Private Limited Company (Sdn Bhd), offering limited liability protection while maintaining operational flexibility. However, LLPs are primarily designed for Malaysian citizens and professional firms, and foreigners may face restrictions when setting up an LLP in Malaysia as it requires at least one Malaysian partner. - Labuan Company:
Ideal for offshore businesses with low taxation with no transaction with Malaysian residents. - Representative Office (RO):
Ideal for foreign companies conducting market research before setting up a Private Limited Company (Sdn Bhd). It cannot engage in revenue-generating activities but allows businesses to study the market, build networks, and assess opportunities before full incorporation. - Branch Office:
Extension of a foreign parent company and less common as it is subject to higher taxes and more compliance.
Unsure which business structure is best for you? Amaze Advisory can help you make the right choice based on you industry and goals.
2. Meet the Legal Requirement for Incorporation
For the purpose of this Guide, we will focus on how to incorporate a Private Limited Company (Sdn Bhd) in Malaysia as it is the most foreigner friendly structure. To incorporate you must fulfill the following:
- At least one resident director who is at least 18 years old and ordinarily resident in Malaysia (can be a Malaysian citizen or a foreigner with a valid work permit/employment pass).
- Minimum one shareholder (which can be individual or a corporate entity).
- A registered business address in Malaysia.
- A licensed company secretary within 30 days of incorporation.
Require a local director or company secretary or business address? Amaze Advisory provides nominee director and secretarial services and business address for foreign business as an interim measure.
3. Register Your Company with SSM
All companies in Malaysia must be registered with the Companies Commission of Malaysia (SSM). The registration process includes:
- Step 1: Name Reservation
Choose and register a unique business name. - Step 2: Prepare Incorporation Documents
Including the company registration form, director/shareholder details, business address and resolution from corporate shareholder. - Step 3: Submit Registration Application
It will take 2 to 5 working days to obtain approval. - Step 4: Receive Certificate of Incorporation
Once approved, SSM issues the Certificate of Incorporation (Section 17).
Amaze Advisory ensures a smooth and fast registration process, handling all paperwork and submissions for you!
4. Obtain Business Licenses & Permits
Depending on your industry, you may require additional licenses, such as:
- Wholesale & Retail Trade (WRT) License:
Required for foreign-owned retail and wholesale businesses such as restaurants or fast moving consumer goods. - Unregulated Service Sector License:
Required for foreign-owned service based businesses such as business consultancy. - Manufacturing License:
For businesses involved in industrial production and manufacturing. - Professional License:
For industries like legal, healthcare, and financial services.
License requirements can be complex – let Amaze Advisory handle it for you!
5. Open a Corporate Bank Account
Once your company is incorporated, you must open a corporate bank account for financial transactions. Most banks require:
- Certificate of Incorporation (SSM Documents)
- Company Constitution
- Directors’ and Shareholders’ details
- Business License (if applicable)
Amaze Advisory assists with selecting the right bank and preparing all necessary documentation.
6. Register for Taxes & Compliance
All companies in Malaysia must register with the Inland Revenue Board (LHDN) for tax purposes, including:
- Corporate Tax (15%/17%/24%) – Standard rate for companies.
- Sales & Service Tax (SST) – Applies to most goods and services.
- Employees’ Provident Fund (EPF) & Social Security (SOCSO) – Required if you hire employees.
Need help with tax registration and compliance? Our tax experts at Amaze Advisory ensure your company meets all financial regulations.
7. Hire Employees & Obtain Work Permits
Foreign-owned businesses can hire local and foreign employees, but work permits/employment passes are required for expatriates. Common visa types include:
- Employment Pass (EP) – For professionals and senior executives, technical staff and senior management.
- Professional Visit Pass (PVP) – For short-term employment less than 12 months.
Common Challenges & How Amaze Advisory Can Help
| Challenge | Solution by Amaze Advisory |
|---|---|
| Finding a local director | We provide nominee director services |
| Complex licensing & permits | We handle all regulatory approvals |
| Tax & financial compliance | Our tax experts ensure full compliance |
| Work permit/Employment Pass applications | We assist in securing Employment Passes |
Conclusion
Incorporating a company in Malaysia as a foreigner is a straightforward process if you follow the correct steps. By choosing the right business structure, registering with SSM, obtaining the necessary licenses, and ensuring tax compliance, you can successfully establish and grow your business in Malaysia.
At Amaze Advisory, we provide end-to-end business setup solutions, including:
- Company Incorporation, Company Secretary and Nominee Services
- Accounting & Financial Advisory
- Tax & Advisory
- Payroll Outsourcing
- Employer of Record (EOR)
- Immigration & Global Mobility
Get Started with Amaze Advisory Today!
Phone: +6013-284 7678 / +6013-323 7678
Website: www.amazeadvisory.com
